Macroeconomics Ch. 26 (GDP)
The market value of all finished goods and services produced by a country's residents in a year, whether at home or abroad, is called:
GNP
What data are needed to calculate GDP?
both quantities and prices of goods and services produced
Refer to the table. Suppose an economy produces only the four goods listed. What is the GDP in this country?
$7,700 (Price x Quantity + Price x Quantity +.....)
A country has a 2016 GDP growth rate of 4.2% and a 2015 GDP of $8,222 (in billions). What was the GDP in 2016?
$8,567; GDP(2016) = GDP(2015) x (1 + growth rate) Divide Growth Rate before calculating.
Given the GDP at the end of both 2004 and 2005, the growth rate of GDP for 2005 is calculated as:
(GDP[2005] - GDP[2004]) divided by GDP[2004] × 100
Consider a country that produces only wheat and corn. Based on the data in the table, the growth rate of nominal GDP from 2005 to 2006 is:
27%; first: add the Price x Quantity for 2005 and 2006. second: use growth rate formula (end-beginning/beg) x 100
GDP in the United States was $14,119 billion in 2014, and grew to $14,660.4 billion in 2015. This represents an annual growth rate of:
3.8%; Growth Rate = (End-Beginning/Beginning) x 100
Consider a country that produces only wheat and corn. Based on the data in the table, the growth rate of real GDP from 2007 to 2008 (in 2005 dollars) is:
8.3%
The difference between nominal GDP and real GDP is that nominal GDP:
measures a country's production of finished goods and services at current market prices, whereas real GDP measures a country's production of finished goods and services at the same prices in all years.
GDP:
measures production in a year, while national wealth measures a stock of assets.
GDP is calculated by:
multiplying the quantity of all goods and services by their prices and adding together the results.
The measure of GDP that has NOT been adjusted for changes in prices is called:
nominal GDP
The calculation of GDP includes:
only finished goods.
A tractor built in 2001 and still in operation today is:
part of today's national wealth but not part of today's GDP.
GDP per capita is GDP divided by:
population
Nominal GDP is calculated using:
prices at the time of sale.
In the national spending approach, consumption expenditures refer to:
private spending on all finished goods and services.
GNP measures:
production by U.S. citizens wherever they work in the world.
How often is GDP reported for the U.S. economy?
quarterly
What is the term for GDP when price changes are NOT included in its calculation?
real GDP
Which of the following is the best measure of a country's standard of living?
real GDP per capita
Real GDP per capita is calculated as the total real GDP divided by the:
total population.
Which of the four towns has the highest standard of living?
town B (Real GDP/Population)
Which of the four towns has the lowest standard of living?
town C (Real GDP/Population)
In general, during any given year:
wealth in the United States will exceed GDP in the United States.
Which of these goods is an intermediate good that would NOT be counted in GDP in the year it is produced?
wood used for making furniture
What are the components of the national spending approach to splitting GDP?
consumption, investment goods, government purchases, and net exports
GDP includes the:
current market value of government purchases of goods and services.
In the national spending approach, net exports refers to:
exports minus imports
Gross domestic product is the market value of all:
finished goods and services produced within a country in a year.
To avoid double accounting, the value of:
finished goods only is included in GDP.
GDP tells us:
how much the nation produced in a year.
A real variable is one that:
includes a correction for inflation.
The most common measure of the size of an economy is:
it's GDP
Which of the following is the best definition of a recession?
A period of significant, widespread decline in real income and employment lasting more than a few months.
GDP is calculated by the:
Bureau of Economic Analysis.
The consumption of the national spending approach:
Consumption + Investment Goods + Government Purchases + Net Exports
What does GDP per capita tell us about a nation's economy?
GDP per capita provides an estimate of the standard of living in a nation.
The market value of all finished goods and services produced within a given country in a year divided by the country's population is:
GDP per capita.
The market value of all finished goods and services produced by a country's permanent residents in a year, regardless of where the production takes place, divided by the country's population, is:
GNP per capita
Which statement is TRUE about a recession?
It is a significant decline in economic activity lasting more than a few months and must be widespread geographically.
Which of the following would NOT be included in GDP for the United States?
Matt purchasing an antique desk for his new home office
Which of the following would be included in GDP for the United States?
Toyota, a Japanese car company, producing cars in the United States
If pressed to choose a single indicator of changing living standards, most economists would probably choose real GDP growth per capita.
True
The factor income approach splits GDP into wages, profit, interest, and rent.
True
The national spending approach classifies all of the spending in a nation as consumption, investment, government purchases, or net exports.
True
Gross domestic product (GDP) is the market value of:
all finished goods and services produced within a country in a year.
A set of tires installed on a vehicle in an automobile factory is counted as:
an intermediate good and its market price is not part of GDP.
The difference between a finished good and an intermediate good is that:
an intermediate good is sold for use as a component in a finished good.
GNP is the market value of all finished goods and services produced:
by a country's permanent residents, wherever they are located, in a year.